Correlation Between New Amer and Indo Global

Can any of the company-specific risk be diversified away by investing in both New Amer and Indo Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining New Amer and Indo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between New Amer Energy and Indo Global Exchange, you can compare the effects of market volatilities on New Amer and Indo Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in New Amer with a short position of Indo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Amer and Indo Global.

Diversification Opportunities for New Amer and Indo Global

0.0

Correlation Coefficient

New Amer  Indo Global

Pay attention - limited upside

The 3 months correlation between New and Indo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Amer Energy and Indo Global Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Global Exchange and New Amer is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on New Amer Energy are associated (or correlated) with Indo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Global Exchange has no effect on the direction of New Amer i.e., New Amer and Indo Global go up and down completely randomly.

Pair Corralation between New Amer and Indo Global

If you would invest  0.07  in Indo Global Exchange on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Indo Global Exchange or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

New Amer Energy  vs.  Indo Global Exchange

New Amer Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days New Amer Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, New Amer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Indo Global Exchange

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Indo Global Exchange are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Indo Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with New Amer and Indo Global

The main advantage of trading using opposite New Amer and Indo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Amer position performs unexpectedly, Indo Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Indo Global will offset losses from the drop in Indo Global's long position.

The idea behind New Amer Energy and Indo Global Exchange pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.